Big questions for marketplace facilitators in 2024

A man sitting at an outdoor table with a laptop, looking at his phone and credit card, as if about to use some form of online marketplace

Retail e-commerce sales continue to increase, in volume and complexity. These trends further intensify tax compliance risks by interacting with related uncertainties, such as stubborn inflation, state-level revenues and budget instability and regulatory volatility. All of which are creating indirect tax compliance turbulence in the U.S. and other global regions (particularly the European Union). Marketplace facilitators have already experienced the behavioral ripple effects of higher systemic inflation rates: 89% of global consumers report that higher prices have made them look for better value, according to a Mirakl survey. While aggregate inflation continues to decrease, supply chain disruptions (coupled with regional shipping and transportation woes) continue to elevate prices in some commercial sectors.  

This combination of factors makes it imperative for marketplace facilitators to get a firm handle on their indirect tax burdens as well as the tax automation solutions that can help mitigate compliance risks. 

On that count, tax teams within many marketplace facilitators are facing challenges when it comes to: 

  • Monitoring and responding to evolving indirect tax compliance requirements as U.S. states continue to revise their nexus requirements as they adjust their tax base to emerging budgetary conditions; 
  • Managing tax compliance across multiple jurisdictions (with different requirements); 
  • Balancing business growth with tax compliance; and 
  • Streamlining the order-to-cash process, enabling a smooth (and customer-centric onboarding experience, sustaining a unified customer experience across all touchpoints and minimizing audit risks; 

How’s that for a varied set of complications? But wait, there’s more.  

From a higher-level economic standpoint, marketplace facilitators should recognize that fiscal uncertainty among U.S. states will drive many jurisdictions to seek new sources of revenue. This search will focus on the continuing taxation of the (global) digital economy, which include e-commerce and online marketplace transactions. As such, remote sellers and marketplace facilitator can expect tax rules (e.g., nexus standards) and rates to continue to undergo frequent changes. 

In response, marketplace facilitators should ensure that their supporting tax technology is up to the task of addressing compliance complexity and risks effectively. The following questions – related to automation scope, accuracy, reporting, flexibility/scalability, support and more -- can help tax teams make an effective determination: 

  • Does the solution support automated seller onboarding and management? 
  • Does the solution determine line-item tax liabilities? 
  • Are tax rates and rules across all relevant jurisdictions updated frequently enough to mitigate compliance risks? 
  • How robust are the solution’s reporting capabilities? 
  • Are related, or “add-on,” services (e.g., registration, tax filing and validation) available? 
  • Does the solution quickly and easily scale as a marketplace expands into new geographies?  
  • To what extent does the solution enable and support a unified experience across all sales channels? 

The Mirakl research also indicates that 94% of worldwide consumers expect to use marketplaces the same or more in the future. These questions will become more important to address as e-commerce and marketplace transaction volumes continue to rise.


Blog Author

George L. Salis, Principal Economist and Tax Policy Advisor at Vertex Inc.  Vertex's Chief Tax Office (CTO) provides insight regarding the impact of tax regulations, policy, enforcement, and emerging technology trends on global tax department operations.

George L. Salis

Chief Economist and Senior Tax Policy Director

See All Resources by George

George L. Salis is Chief Economist and Senior Tax Policy Director. He is an economist, lawyer, and tax professional with 29+ years’ experience in international taxation and trade compliance, tax planning and controversy, fiscal regulation, and tax economics consulting. He is responsible for analysis of economic, fiscal, legal, trade, and development issues in countries, as well as tracking and analyzing the rapid change in tax policies and regulations, and inter-governmental organizations, and tax administrations around the world.

George is the recipient of the Advanced Certificate in EU Law from the Academy of European Law, European University Institute in Florence, and the Executive Certificate in Economic Development from the Harvard Kennedy School of Government.

George received his BSc in economics and political science, an LLB (Honours), an MA in legal and ethical studies, and an LLM (Honours) in international tax law. He also holds the PhD in international law and economic policy, and the SJD in Taxation from The University of Florida, Levin College of Law. George is a Certified Business Economist (CBE- NABE).

Explore Our Partnership with Mirakl

With Mirakl, organizations across B2B and B2C industries can launch marketplaces faster, grow bigger, and operate with confidence as they exceed rising customer expectations.

Discover the 7 criteria for hiring a compliance outsourcing provider in this white paper with Vertex Inc. Vertex is the leading provider of tax technology and services.